Which of the following is most likely a period cost?
A) Depreciation on factory lunchroom furniture
B) Salary of telephone receptionist in the sales office
C) Salary of a security guard for the factory parking lot
D) Computer chips used by a computer manufacturer

Question

Quizplus · Accepted Answer

A period cost is a cost that is not directly related to the production or sale of a product. The salary of a telephone receptionist in the sales office is a period cost because it is an administrative expense that is not directly involved in producing or selling goods. Depreciation on factory lunchroom furniture and computer chips used by a computer manufacturer are both examples of product costs because they are related to the production or sale of goods. The salary of a security guard for the factory parking lot could be either a period or product cost depending on the company's accounting policies.

Which of the Following Is Most Likely a Period Cost